cancel
Showing results for 
Search instead for 
Did you mean: 

Attempting to rebuild credit and need advice.

tag
Anonymous
Not applicable

Attempting to rebuild credit and need advice.

Hi,

My husband and I were always Ok with our finances. We weren't perfect by any means but always had a decent grasp on it. We had 9 Credit Cards between the both of us. We always made sure the balance was paid in full. We were actually trying to build our credit. However, December of 2015 (Husband company bankrupt, didn't even pay him last 2 checks) and January 2016 (My company laid off to cut costs) we both lost our jobs. We tried to at least make minimum payments on all our cards and it fell flat. Around March of 2016 (This year) we just couldn't keep up anymore. Some of our accounts have since gone into collections, but around Mid and End of July we both got new jobs that don't pay quite as well as our old jobs, but it does give us some margin. We are planning on talking to our credit card companies and either settling the debt or making arrangements to pay them off.
 
Our issue is that we probably can't pay them all off at the same time. Right now our plan is to bring the accounts that are only 30-90 days past due current. From there we plan to tackle the smallest account in collections and pay that. Then slowly move to the next. If we have a higher disposable income, we plan on probably working on two. We want to eventually settle everything and made payment to everything within a year. However, it is frightening to be going through this. I need moral support from those who have been down this road and know there is light at the end of the tunnel. 
 
Also, I wanted to see if this was a good plan or is there a better recommendation? Is it likely that if we call the creditors that they would at least offer a lower payment or split our past due balances into smaller payments until we are caught up? 
 
I've had success with Discover offering me a smaller monthly payment for 12 months and splitting my past due balance into four payments. 
 
Thank you in advance for any advice and criticism! 
Message 1 of 4
3 REPLIES 3
Anonymous
Not applicable

Re: Attempting to rebuild credit and need advice.

That is a good plan to pay those little ones first but if there's any chance you can call them directly and slamming huge payment at once and they remove it that has a lot of value for your credit record. Decide what is more important a year from now being almost debt-free or still being in debt with a few less credit dings.
Message 2 of 4
Anonymous
Not applicable

Re: Attempting to rebuild credit and need advice.

Thank you for your response. I will try your suggestion thank you. 

 

Generally, if I do work through all the accounts that are already in collections, is it likely that my score will improve in the next year or two? (With bringing accounts in collection current, and bringing down their balances and making no more late or missed payments). Example, I bring all those current, pay down the balance, make on time payments. Out of all the accounts in collections, I pay off one or two at a time until I get to them all. Will this improve my credit any or will I have to wait until ALL collections account are paid off? I don't plan on acquiring any new cards and such, but I do plan on keeping the cards with no annual, and lowest interest open to continue building credit as I want to buy a house in the next 5 years. 

 

 

Message 3 of 4
srloring13
Regular Contributor

Re: Attempting to rebuild credit and need advice.

For the accounts in collections, see if they will do a pay for delete but I recommend approaching them after you have the funds to settle the account in full.  Make sure any agreements you make with the collection agencies you get in writing.

FILED CH7 BK 02/25/13 -- DISCHARGED 06/10/13
Starting Scores 06/10/13 EQ474 EX538 TU503
Message 4 of 4
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.